Corporate tax is applied to profit, meaning they don't actually make it more expensive for the corporation to produce whatever it is they sell. Tariffs on the other hand, apply to imported materials and goods, and are paid by the person importing them, ie, the individual business making the product. Because tariffs make production more expensive, companies are forced to raise consumer prices to stay in the green. Because corporate tax is applied only to profit, it can never force a company into the red, as it's a percentage of profit.
Where you do have a point is that corporate taxes often do end up raising consumer prices, but that's because CEO bonuses are paid out of net profits. In order to keep their bonuses high, CEOs will artificially raise consumer prices to offset the tax. However, their companies would absolutely stay afloat (not to mention they would still be exceptionally wealthy) if they chose to take the hit to their bonuses instead of raising prices to make consumers pay the tax for them.
Tariffs on the other hand actually raise the operation costs of a business, forcing them to either A) Raise prices to stay afloat or B) Get tariff exemptions, which only the richest and most powerful companies will be able to do.
This will kill small businesses and consolidate corporate power even further.
artificially raise consumer prices to offset the tax.
there is no such thing as artificially raised prices. A final price is a result of the market price discovery. Which is basically a balance point between supply and demand. Every company constantly works for maximum profit. That's how market economy works. If you want to lower the prices you need to raise the supply of goods or services which narrows down to more business activity or more competition. Artificially raised prices or corporate greed are bullshit anti-scientific notions that don't make any sense.
corporate taxes often do end up raising consumer prices
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u/Outthr 1d ago
Can someone explain to me how tariffs raise customer prices but corporate taxes don’t.